All startups encounter challenges, even wildly successful startups have their own obstacles. There are areas that a Hardware Startup has to worry about that a traditional tech startup focusing on software does not.

Have you ever heard the word “supply chain” in a software startup? Probably not, because they aren’t worried about moving physical products around the world. This presents hurdles in other areas as well, like cash flow and product quality that has huge impacts on hardware startups.

Here are a few different hardware challenges, along with some resources that may help:

Supply Chain – Managing a supply chain is not just as simple as placing a purchase order for components. Supply chain encompasses everything that it takes to get the correct product in your hands. A simplified way I explain it is with the 3 R’s: the right part, at the right place, at the right time. If any one of those three encounter issues, you could be stuck waiting for parts to arrive or having to rework the wrong part. Here is a recent blog post from Canary that talks about some of the implications of supply chain.

Cash Flow is King – Cash is an important factor in any business, but as a Hardware Startup, cash flow can make or break you. Be careful not to underestimate the amount of cash you will need, and don’t overlook the total spend when evaluating unit cost. Basically, don’t overrun your headlights. Vendors may require payment up front for components, then you have to extend credit terms to your customers. Factoring that time in, you could be paying for materials months in advance of when you will be paid for them. I’ve always enjoyed Marc Barro’s blog, and I think he provides a lot of valuable information in his How To Fund A Hardware Startup post.

Product Quality – While I don’t believe that anyone ever sets out to build a product that is low quality, whether it’s software or hardware if you are taking the leap into starting your own business you don’t want a reputation of delivering a product that doesn’t live up to it’s expectations. One of the scariest terms for a Hardware Startup should be “Product Recall”. You can’t update a physical product via the cloud. Taking a quote from The Ultimate Guide to Bootstrapping a Hardware Startups:

Quality is everything: get samples often, test them completely, keep a log of change requests and hold your manufacturing partner accountable to deliver the best quality product. There are no shortcuts here, only painful product returns.

While this is by no means a complete list of the challenges you will face, these are three that tend to be painful if the lessons are learned the hard way.

RelianceCM has been working with companies to develop and manufacture their products in the Apple MFi program. We received our MFi Manufacturing License, which allows us access to Apple licensced technology. After having worked with a number of companies trying to navigate the MFi process, I thought I’d compile some of the common questions we receive.

Do I need to get an Apple MFi License?

There are two types of licenses you can obtain, a Developers License and a Manufacturing License. If you are only designing your product and plan on having someone else manufacture it for you, you will only need to get your MFi Developers License.

Does my product need to be Apple MFi Certified?

If you are going to develop electronic products using licensed technology from Apple, then you will need to join the MFi program. If your product uses the Lightning Connector, it will also need to be manufactured with an Apple MFi Manufacturing Licensee. This means that the manufacturing licensee that you choose will manage the product plan, all reporting to Apple, and procurement of components.

What if my product connects via Bluetooth?

This one depends. If the device does not use any MFi licensed technology and uses either Bluetooth Low Energy or one of the standard Bluetooth profiles supported by iOS, then you do not need the MFi program.

I’m trying to develop an App, does any of this apply to me?

No. If you are only developing Apps, even if they communicate with a piece of hardware, you do not need an MFi license. You will need to join the iOS Developers Program to gain access to the iOS SDK.

To lean more about the specifics of the program you can find what you need on the Apple website. If you have any questions about the program do not hesitate to contact me at davids@reliancecm.com

The Coolest Cooler by Ryan Grepper is on track to becoming Kickstarter’s most-funded project ever. The current title of most-funded project goes to the Pebble Smartwatch, which raised over $10 million in 2012. Not only is this crowdfunding feat a great achievement for Grepper, but it also helps put the growing Portland hardware startup scene on the map.

Ryan Grepper probably had no idea of the success that was coming, considering the Coolest Cooler launched and failed on Kickstarter back in November of 2013. That didn’t stop the Portland entrepreneur from trying again, and it’s a good thing he did. Coolest Cooler now sits at the top as the most-funded Portland project and could soon be the most-funded project in Kickstarter history (funding ends on August 29th).

The Portland startup scene has long been dominated by software. Software companies such as Urban Airship, Puppet Labs, and Vizify have helped make a name for Portland startups. However, more and more hardware startups are emerging and the hardware community is growing. Whether it’s a connected device or a really cool cooler, it’s always great to see Portland entrepreneurs succeed.

Choosing someone to build your product is a very big decision that many hardware companies face. For those companies that have little to no experience working with contract manufacturers (CMs), evaluating the relationship can be difficult. It’s pretty straight forward; working with your CM should be easy. Here are 5 signs that indicate you’ve picked the right CM for the job.

1. Responsiveness- How responsive is your CM? Do you hear crickets or is there always someone around to help you? Let’s face it; there will probably be last minute changes on your design. Some of these changes can be missed without a responsive CM.

2. Communication- Communication should never be difficult with your CM. Life Happens… your CM shouldn’t hesitate to reach out to you when problems crop up. Whether it’s an obsoleted part or a question about your design, your CM should be contacting you before moving ahead with a decision that could impact the performance of your product.

3. Proactive Processes- Are you constantly holding your CM’s hand? All designs need input from a manufacture’s prospective and your CM should be providing you with DFM (design for manufacturability). They build products day in and day out and know a thing or two about tweaking designs to save cost and/or improve functionality. Don’t be afraid to lean on them for help.

4. Product Fit- USA or China? While manufacturing in China is commonly talked about and publicized, many startups are beginning production in the US. There are many factors to take in to account when deciding whether or not to manufacture overseas, however that is a topic for another blog.

5. Reliability- How reliable is your CM? Do you have confidence in them or are you always second guessing what they say? Trust plays a big part in any successful relationship. If you can’t trust your CM to produce a quality product in a timely manner then maybe it’s time to look elsewhere.

Bottom line- if your CM is holding you back then maybe it’s time to move on.

There’s a lot of talk about RoHS2, and every company that plans on marketing their product(s) in Europe needs to be aware of the RoHS2, REACH, and WEEE2 directives. These directives were put in place to help protect human health and the environment.

While the RoHS2 Directive does not add any additional restricted substances to the original six identified substances, it does introduce several important changes to the original legislation.